Recent research at LSE into the productivity gap between which leaves the UK trailing behind the US, France and Germany has found the main problem to be family-run firms. This somewhat surprising conclusion suggests that family-run businesses suffer from poor management practices. The report author Nick Bloom was so convinced of his findings that he urged Gordon Brown to drop the 100% inheritance tax relief given to family businesses.

The problem is not passing down ownership of the business to the next generation but passing down control. Selecting a Managing Director from within the family means that the choice of managerial talent is severely limited. This is especially important in large corporations which require a skillful CEO and not someone who is young and inexperienced.

In addition, if the eldest child is groomed from an early age to be the eventual successor it can actually lead to them coasting through their education and the early part of their career due to a lack of motivation. They may feel there is no need for them to try because they are guaranteed top job, therefore they do not develop the skills to be able to do the job well. It can also lead to low morale within a company because there is a ‘glass ceiling’ that employees will never be able to be promoted above as they are not part of the family.

The report recommends that forBritain to close the productivity gap with the US , business owners should consider only passing equity stakes to their children and giving the running of the company to somebody else.

Hat-tip to Robert Moore from Business Data International Limited

Here is this week’s news round-up for home business, micro business, sole-traders, freelancers, self-employed and any one who is interested in small business news from the United States:

• Small Firms Find Credit Is Tightening: The Small Business Administration has not said publicly that it is worried about a credit squeeze but signs point to a decline in business loans through its main program.
• E-Commerce Report: Making Appointments for Doctor or Dinner:A set of Internet start-up companies has emerged to help service providing small businesses use the Web as more than just an online brochure.
• Fortune Small Business ranks San Antonio 34th best entrepreneurial market: San Antonio has been named one of the best places in America for an entrepreneur to live and launch a new business. (TWX)
• Grant establishes Houston employee health care program: Houston will share in a $1-million Texas Health and Human Services Commission grant to develop health care programs for small business employees.
• SBA streamlines loan procedure docs, adds search functions: >The U.S. Small Business Administration has modernized its standard operating procedure for lender and development company loan programs.
• Will March Madness Lead to Recession?: Probably not. But according to some estimates, the NCAA basketball tournament could cost the U.S. economy almost $2 billion in lost productivity. Why it’s easier than ever to waste time at the office — and what companies are doing to prevent it.
• Running a Company From Home: Setting clear boundaries and carving out time for your work is the key to being a well-balanced home based entrepreneur.

As always this list is not exhaustive, but I hope it will give you a little overview. — ST.

Here is this week’s round-up of technology news small business owners may find informative, useful or entertaining:    

• Is Your Great Idea A Real Business? - Applying some realism to your business idea will help it get off the ground 
• Making money while you sleep - An example of someone who was able to turn their idea into a success story
• Doing business in the 21^st century - The importance of technology for SMEs
• Approval for mobiles on aircraft - Soon, people will even be able to get in touch with you in mid-air
• Entrepeneurs and Experts Reveal Big Ideas at Microsoft’s Small Business Summit 2008 – A run-down on Microsofts new services for SMEs 
• Windows XP: Going, going … gone? - Even though Windows XP is Microsoft’s best OS to date, its days are numbered… but… 
• Should Microsoft throw away Vista ? - The much-maligned Windows Vista received its first Service Pack last week amidst calls for an XP Second Edition  
• Adobe puts free Photoshop online – Photoshop Express is completely web-based and can be used from any computer 
• OpenOffice.org 2.4 released - The free open-source office software gets new update, read about the changes here
• Should Mac Users Run Antivirus Software? - Unless you are performing high-risk tasks, it still appears to be safe to run a Mac without virus protection
• Even Apple will be hated one day - Because Microsoft was once a fresh innovative company run by a young upstart
• Apple Software Update - On his blog, the CEO of Mozilla criticizes Apple’s recent iTunes update that forces the Safari browser on Windows users
• How Apple Got Everything Right By Doing Everything Wrong - An examination of Apple’s strange approach to business which has paid off big for them
• What will life be like in the Year 2008? - A 40 year old Mechanix Illustrated article about what they expected life would be like today
• Web-based tools aid small business – Some very useful web-tools for SMEs, but they neglect to mention WinWeb!

Here is this week’s news round-up for home business, micro business, sole-traders, freelancers, self-employed and any one who is interested in small business news from the United Kingdom and Ireland:

• Inspire: insurance for SMEs: Specialist insurers Hiscox, and brokers Allison & Partners, have this week launched a partnership aimed specifically at offering insurance to small businesses and SMEs.
• SMEs Embrace The Internet, Good or Bad? A report earlier this year by Cranfield School of Management, analysing SMEs attitude to the internet, showed encouraging results with 84% of small business owners having a website and 97% having an e mail account.
• ISME welcomes planned cut in red tape for business: The Irish Small and Medium Enterprises Association is welcoming government plans to reduce red tape for companies operating in Ireland.
• Post Office closures will hit local communities, says FSB: Ahead of todays House of Commons vote on the future of local post offices, the Federation of Small Businesses has called on politicians to take every possible step to retain the post office network.
• Research shows rising credit and interest rates are hurting small firms, Warns FPB: New research carried out by the Small Business Research Trust (SBRT), in conjunction with the FPB, shows that smaller firms are bearing the brunt of the credit crunch. The FPB believes that barriers to growth faced by small businesses, in particular the burden of tax, red tape and late payment, must be urgently addressed.
• Renew TV licence now and save money of face a £1,000 fine warns FPB: The FPB is warning that smaller firms which allow their employees to watch television programmes online must still purchase a TV licence, or face a fine of £1,000.
• Transport taxes will overshadow ‘green’ Incentives, insists FPB: The FPB is warning that additional transport taxes will overshadow ‘green‘ incentives, which were announced in the 2008 Budget to encourage smaller businesses to use more fuel-efficient company cars.
• Small UK companies face cash squeeze: Successful management of money flow is seen as crucial to the survival of thousands of businesses that are a pillar of the British economy

As always this list is not exhaustive, but I hope it will give you a little overview. — ST.

Businesses today are extremely interested in finding out what their customers think and factoring their opinions into the decision making process. The importance of knowing your customer in great detail means that nowadays large businesses are prepared to pay specialists to find out more about them.  Your survey service would create online questionnaires and polls for a client in order to research a particular topic and then provide them with the results.  

Skills needed: Experience in writing survey questions or conducting research (such as a dissertation) and also some experience in campaign development.  

Business environment and set-up cost: There are no barriers to your business trading globally, as long as you are able to translate your surveys into other languages. This is potentially a slightly more expensive business to start-up than my previous start-up ideas. A high-end computer will be needed (at least one, possibly more depending on the number of clients) and a printer. You will need administration and survey software that can handle your requirements. The website will also need to be developed and hosted by someone. The overall cost might vary from a few thousand to about £10,000 depending on the scope of the business.  

Marketing Techniques:  

• Add your website to the popular pay-per-click search engines
• Establish mutual links with link directories and web rings
• Become involved in online forums and mailing lists, always providing a link to your website in your signature
• Use OnlineOffice to set up web-site, blog and online shop to promote your business online

Complimentary business ideas: If you wish to expand your business down the line you can extend your market research to incorporate other services such as offering marketing advice.  

Notes: Payment is likely only to be received after the survey has been completed and the results collated. You may have trouble getting people to participate in an online survey so it can be useful to offer some form of prize or reward as an incentive.  

Online examples & resources:  

• Hosted Survey – excellent example of an independent survey service
• QuestionPro – professional survey software
• Polldaddy – a free online alternative
• Onlinesurveys.com – a giant database of surveys with prizes awarded to participants

Small business owners often overlook the value of taking the time to write a comprehensive business plan at start-up. At first glance, it can seem like a daunting task but there are a number of reasons why it is worth the effort. A bank or venture capitalist will likely require that they see a detailed business plan before lending you any money, to make sure that you are a safe investment. A plan will also give you clear objectives to strive towards and you can use it as a kind of ‘roadmap’ to refer back to during troubled times.  

Things to remember:  

The business plan has a number of essential steps:  

• Executive Summary – the first section of your plan, but should be the very last thing you write. This is because it will serve as a summary of the rest of the plan, so that a prospective reader will know whether they should keep reading. The summary should be very brief.
• Market Analysis – a description of the industry you will be entering, information on your proposed target market and the results of any market testing you have conducted. There should also be some data about your major competition.
• Company Description – detailed information about all the elements of your business, including the factors that will help make it a success.
• Organisational Information – this should contain data about your company structure and management team.
• Marketing Strategy – a description of the type of strategy you will adopt. This will include how you plan to initially penetrate the market and how you will distribute the product. In addition it will state how you will communicate with your target audience and how you propose that the business will grow in the future.
• Product or Service – you are now ready to talk about your product or service. The benefits of it must be stressed here, along with any patents or research & development activity. Realistically evaluate your product life cycle.
• Funding – this is the part where you ask an investor for money. Make sure that you can justify the amounts requested and make it clear the timeframe in which they will begin to receive a return on investment.
• Financial Data – these are the figures which will back up your request for money. This should include realistic forecasting and projections – investors or banks will be able to tell if your predictions are wildly inaccurate.
• Appendix – this will include statistical data that will be provided on an as-needed basis. For example, you may not want every person who reads your plan to know your credit history but a potential lender will likely demand it. You can place data like this (resumes, legal documents, leases, studies etc.) in the appendix and only give it to the serious investors.

Here is this week’s news round-up for home business, micro business, sole-traders, freelancers, self-employed and any one who is interested in small business news from India:

• Harassment of Kashmiri traders outside widely condemned: Srinagar, Mar 21: The recurring incidents of harassment of their counterparts in different Indian states have evoked strong reaction from the Valley business fraternity with top business chambers here demanding immediate halt to such actions. andnbsp; Both the Kashmir Chamber of Commerce and Industry (KCCI) and the Federation Chamber of Industries Kashmir (FCIK), the apex business and industrial chambers in the Valley, while condemning the recent harassment of Kashmiri traders in
• SBI to increase business in Bengal: Gangtok, Mar 23: With the small and medium sector emerging as the strongest growth area, State Bank of India expects a 25 per cent surge in deposits and 16 per cent increase in advances in the Bengal circle this fiscal. andnbsp;“ The deposits will shoot up by Rs 7,500 crore at Rs 37,000 crore and advances will grow by Rs 4,000 crore at Rs 24,000 crore this year,” Chief General Manager Jayanta Kumar Sinha said.andnbsp;Talking to reporters, Mr Sinha said small and medium
• India all set to change business landscape by 2018: India, along with emerging market peers China, Brazil and Russia, is expected to have a greater influence on the markets across the world by 2018, a study says.
• DoT warns Blackberry service providers over security system: The government has asked telecom companies to make possible within 15 days, monitoring of content transmitted through Blackberry or stop the service.
• India will be the second largest mobile phone market: TRAI: India is set to emerge as the second largest mobile phone market in the world after China in April with the subscriber base already crossing the 250-m
• Don’t be afraid of difficulties: Starting with a single shop way back in 1940s they have grown into a matured enterprise that today eyes vast market for its products outside the state. After its diversification the firm has become one amongst the reputed electric companies in north India. Manufacturing nationally approved high capacity transformers, it last year bagged the KCCI award of excellence for its quality products. Giving employment to around 50 people, the company has ambitious

As always this list is not exhaustive, but I hope it will give you a little overview. — ST.

Here is this week’s news round-up for home business, micro business, sole-traders, freelancers, self-employed and any one who is interested in small business news from Australia and New Zealand:

• Business confidence plunges:The latest Auckland Chamber of Commerce quarterly business opinion survey points to a sharp deterioration in business sentiment. Of 1000 businesses surveyed, 64 per cent said they expected the general business situation would get…
• Overhaul Beneficial To Nz Companies, says IBM: IBM is overhauling its multimillion-dollar New Zealand software business, a move it says will benefit about 50 local companies which on-sell its products. Since 2002 IBM has channelled all its software sales through a single New…
• Creditors take hit to keep firm in business: A North Shore liquidator believes it has achieved a first under new company insolvency laws by getting creditors to agree to its plan for rescuing a local firm. This week Waterstone Insolvency got creditors of Northern Energy Services…
• Business hit by rising rates: FOUR official increases in interest rates since August last year are taking their toll on business with a new report showing confidence has fallen to its lowest level in 15 months.
• Labour’s firs 100 days: What does it mean for tech?: With its first 100 days behind it, Labor has given the IT industry a lot to think about: standing by election promises, centralising Federal government procurement, and instigating funding cuts.
• Following the money trail: The business interests of Blue Chip co-founders Mark Bryers and Bob Bangerter are under scrutiny as liquidators follow a complicated money trail to track millions of dollars of investors’ money. Blue Chip liquidator Jeff Meltzer…

As always this list is not exhaustive, but I hope it will give you a little overview. — ST.

The electronic newsletter is now a very commonly used marketing tool for most businesses with an online presence due to their usefulness in building brand awareness. Many businesses choose to use someone from outside the company to manage their newsletter for a fee. Distribution can vary in frequency from daily to monthly, therefore the amount of work you will have can vary depending on the needs of the client.

Skills needed: You will need previous experience in writing copy professionally as you will need to be able to deliver a clear message using only a few words. Basic skills in web publishing are also necessary.  

Business environment and set-up cost: Newsletters can be translated and published in multiple languages so there is global potential.  You are unlikely to make much money from this career unless hired to write for someone else as most newsletters are given away as promotional tools and the only revenue stream they generate comes from sponsorship or click-through advertising. The cost to start up this business will vary, depending on how much computer equipment you already own, from very little to around £3000.  

Marketing Techniques:  

• Include your clickable logo on all client newsletters if possible
• Try and arrange a reciprocal link scheme with your clients, so that their websites are linked to you and you to them
• Become actively involved in forums and newsgroups related to online advertising
• Add your website address to directories related to mailing lists and marketing
• Create your own impressive newsletter that you can send out to prospective clients which details the services you offer and how it could help their business
• Use OnlineOffice to set up web-site, blog and online shop to promote your business online

Complimentary business ideas: You could use newsletter development in conjunction with other online marketing techniques to offer full service to clients  

Notes: It is important to respect the regulations relating to e-mail, especially in respect of privacy laws. These vary worldwide so you will need to become familiar with the rules in your country. Payment for your services is normally half up front and then half at the end of a campaign (which normally lasts six months to a year).  

Online examples & resources:  

• The Newsletter Factory – example of a successful newsletter company
• Writing email newsletters – useful guide covering the basics of newsletter development
• Newsletter templates – large selection of free templates from Microsoft
• Newsletter Access Directory - massive directory of newsletters  

Here is this week’s news round-up for home business, micro business, sole-traders, freelancers, self-employed and any one who is interested in small business news from Canada:

• ABOE Lockworks holds the key to strange tales: Small Business — ABOE Lockworks Ltd.
• Leadership: Guts not included: For Canadian business leaders, change is the new name of the game. Do you have what it takes to thrive in the new global economy?
• Dell looks eastward for PC customers: As U.S. economy stumbles, computer maker eyes Chinese, Indian
• Spigit Launches IdeaSpigit: The First Customer-Powered Productivity Platform for the Enterprise: Spigit combines business intelligence with crowdsourcing to help decision makers separate the signal from the noise.
• Speed up tax relief, Northern Ontario business tell provincial government: Toronto - The Canadian Federation of Independent Business delivered hundreds of signed faxes to Queen’s Park today, calling on the provincial government to accelerate its plan to reduce Business Education Tax (BET) rates in next week’s budget. The faxes, from small and medium-sized businesses in Northern Ontario, were sent to the Minister of Northern Development and Mines, Michael Gravelle.
• Women lead Business Builder award winner’s list: Companies founded, owned or at least co-managed by women were prominent among the category winners this year in the annual Business Builder awards sponsored by the North Saskatoon Business Association.
• Business gives budget mixed reviews: REGINA — Business generally liked the emphasis on infrastructure spending in Wednesday’s budget, but some groups were skeptical the $1-billion capital budget could be attained, given the current labour shortage.
• Business Beat: A new business-university alliance is aiming to make the Windsor area a centre for computer software technology.
• DHz fills media void for resort developers: Resort developers continue to campaign heavily here to persuade Albertans to invest in properties across Western Canada and into the U.S. and farther south. It’s a huge and exciting business that has obviously enjoyed great returns from the advertising by talented agency people.
• Quebecor faces new challenge: TORONTO — Commercial printer Quebecor World Inc. faces a new challenge from The Economist as it restructures under protection from creditors. The well-known business magazine, says in a court filing that it “desires to terminate the printing agreement effective at the end of the initial term by providing Quebecor World (USA) with a written notice … on or before March 31, 2008.”

As always this list is not exhaustive, but I hope it will give you a little overview. — ST.